What You Need To Know About FHA
Home Refinancing

Attn: Special Rates Available Until For Residents Of Your State & Neighboring States!

FHA loans assist low to middle income families in refinancing and purchasing their home. After the mortgage catastrophe of 2009, even the FHA has raised their credit rating standards when it comes to lending. However, most families have little or no trouble refinancing or purchasing with FHA refinancing, according to FHA.com. Keep in mind though, FHA loan limits vary from state to state across the country from a maximum of $636,100.00 in high-cost areas down to $453,100.00 in average-cost areas.

Please note that Peak Home Loans are experts at getting our clients the hassle-free, low cost, little-to-nothing down FHA home loans they desire. Another thing to remember, most people have better credit than they think, usually Fair Credit or better, keep this in mind while filling out our online form. When contacted by us, kindly ask our loan professional any question you may have. They will be more than happy to assist you in finding the best loan, either conventional or FHA, for your particular circumstance. Remember, all loans don't fit all people; if you need a mortgage loan, we'll find the right one for you.
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HUD (Department of Housing and Urban Development) is the overseeing branch of government for the FHA (Federal Housing Administration). The FHA started about 80 years ago for the purpose of helping families of average means to enjoy home ownership. The FHA also offers an FHA refinance option, says HUD.gov at the home owner will repay the loan. Therefore, lenders are more likely to offer a loan guaranteed by the FHA, and that loan can often carry better rates and terms than that of a conventional loan.

We have four types of FHA Refinance Loans:

FHA Streamline Refinance - This refinancing option is considered
streamlined because it allows you to reduce the interest rate on
your current home loan quickly and oftentimes without an
appraisal. FHA Streamlined Refinance also cuts down on the
amount of paperwork that must be completed by your lender saving
you valuable time and money.

FHA Cash-Out Refinance - This refinancing option is
especially beneficial to homeowners whose property has increased
in market value since the home was purchased. A Cash Out
refinance allows homeowners to refinance their existing mortgage
by taking out another mortgage for more than they currently owe.

FHA Simple Refinance - The FHA Simple Refinance allows
homeowners to go from their current FHA Loan into a new one,
whether it's a fixed-rate loan or an ARM. This refinance is the
most straightforward, and there is no option for
cash-out. Lenders will require a credit qualification, income,
and assets to ensure the borrower meets the loan requirements.

FHA Rehabilitation Mortgages - Many buyers decide to
purchase a home that is significantly older, and not in the best
condition. The FHA 203(k) Rehabilitation Loan enables borrowers
to finance the purchase or refinance of a home, along with its
renovation or "rehabilitation" of their existing home.

Features Of An FHA Refinance

1.) A Lower down payment is required.

Borrow up to 100% of your
home's value for Rate
Reduction

Cash-Out up to 85%.

Low Rates are available.

2.) Poor credit often qualifies.

Borrowers with a credit score as low as 500 may qualify.

A credit score between 580 and 620 is ideal.

Borrowers need a 2 year history of on-time bill payments.

Borrowers need 2 years of steady employment.

3.) Higher debt to income ratio allowed.

Debt to income ratio is as follows: add all your total monthly payments together, mortgage, credit cards, car loans, etc. Multiply that by 100%. Divide that total by your families gross income. That is your debt to income ratio.

Conventional (non-FHA and non-VA) loans allow for a maximum of
50% debt to income ratio.

FHA loans (non-conventional) allow for a maximum debt to income ratio of
60%.

4.) Mortgage insurance is required.

A flat 1.75% of the loan amount at closing - $1,750 for each $100,000 borrowed.

Monthly mortgage insurance of 1.25% if your down payment was less than 5%.

Monthly mortgage insurance of 1.20% if your down payment was more than 5%.

Carry the insurance for a minimum of 5 years.

Can drop the mortgage insurance after 5 years and your principle balance is 78% or less than the original purchase price, or original refinance amount.

5.) FHA loan disqualifications.

A FICO (Fair Isaac) score lower than 500.

A bankruptcy less than 1 years old.

A foreclosure less than 2 years old.

Owe the federal government money, i.e. taxes, student loans, liens.

Is An FHA Refinance Home Loan Right For Me?

You have a choice between a conventional loan and an FHA loan. As was discussed earlier, FHA loans are easier to qualify for, sometimes have lower rates and better terms, need a lower down payment, but require mortgage insurance which can become expensive. The bottom line is you will have to speak with a mortgage expert and have them analyze your financial state of affairs. Individuals in the process of getting their finances together, may want to do just that first, and wait until their finances become more stable before going ahead with an FHA loan, or any type of mortgage. Many times FHA loans are your best, but there are sometimes they are not. At Peak Home Loans, we specialize in FHA loans for refinancing and home buying. If it's a government-backed loan you need; look no further, Peak Home Loans is here to help.